October 14, 2004
House Small Business Committee Chairman Don Manzullo (R-IL) is voting October 7 for legislation to help U.S. manufacturers grow and create jobs by providing tax relief for the work they do in the U.S.
The American Jobs Creation Act of 2004 (H.R. 4520) provides a 9 percent tax deduction for manufacturers—large and small—on the goods and services they produce in the U.S. It is expected to pass the House Oct. 7 and the Senate later in the week before it is sent to the president for his signature.
The legislation, which replaces the Foreign Sales Corporation/Extraterritorial Income (FSC/ETI) program for U.S. exporters, also halts European tariffs many U.S. manufacturers and farmers have paid on their exports this year since the World Trade Organization (WTO) ruled FSC/ETI and illegal trade subsidy.
For the past 18 months, Manzullo, chairman of the House Manufacturing Caucus, and congressman Phil Crane (R-IL), vice-chairman of the Ways & Means Committee, led the effort in Congress to ensure the legislation provides incentives to help manufacturers continuing operating in the U.S. The original bill, authored by House Ways & Means Committee Chairman Bill Thomas (R-CA), only provided benefits to U.S. multinational companies operating abroad. Several drafts later, the Thomas bill pared back the international tax relief benefits while providing tens of billions of dollars in tax incentives to encourage manufacturers to keep operating in the U.S.
"This legislation will provide significant tax relief to help our manufacturers grow and create jobs. In addition, it will encourage our manufacturers to keep jobs in the U.S., because they will pay higher taxes on the business they send offshore," Manzullo said.
The legislation also includes an extension of Section 179 expensing, which will allow small businesses to expense immediately up to $100,000 of new investments through 2007. Other provisions include a reduction of the depreciation period for restaurants and leasehold improvements from 39 years to 15 years, and S-Corporation reform and simplification.
For more details about the bill and to calculate potential tax relief savings, visit the following National Association of Manufacturers (NAM) Web site: www.nam.org/s_nam/doc1.asp—CID=14&DID=232214.